Development Aid and Economic Growth

Sanjay G. Reddy · Camelia Minoiu

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International Development and Aid Economic Growth and Productivity Economic Growth and Development

Abstract

We analyze the growth impact of official development assistance to developing countries. Our approach is different from that of previous studies in two major ways. First, we disentangle the effects of two kinds of aid: developmental and non-developmental. Second, our specifications allow for the effect of aid on economic growth to occur over long periods. Our results indicate that developmental aid promotes long-run growth. The effect is significant, large and robust to different specifications and estimation techniques.

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References

1998Initial conditions and moment restrictions in dynamic panel data models 1995Initial conditions and moment restrictions in dynamic panel data models n.d.Aid, Policies, and Growth 2000Who Gives Foreign Aid to Whom and Why?1996Politics and the effectiveness of foreign aid 2001Aid and growth regressions 2001GMM Estimation of Empirical Growth Models 2003Can Foreign Aid Buy Growth?

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